Reed's, Inc. Completes Acquisition of Sonoma Sparkler Brand

LOS ANGELES, CA–(Marketwire – October 28, 2009) – Reed’s, Inc. (NASDAQ: REED), maker of the top-selling sodas in natural food stores nationwide, announced today that it has purchased the brand and certain assets of Sonoma Sparkler, including the six beverages sold under the brand, for a price of $252,000. The Company commenced packing and selling the Sonoma Sparkler products in June 2009.

Branded sparkling juices sold in the 750ml size bottles represent a significant part of the overall beverage market. Two privately-held companies, Martinelli’s and Knudsen’s are generating roughly $50 million in sales from mainstream supermarket accounts alone. According to recent IRI data, Martinelli’s generated roughly $45 million per year in sales and Knudsen’s did roughly $5 million in sales of sparkling juices from this category.

Reed’s has proven its success in acquiring and growing brands. The company bought the Virgil’s brand less than 10 years ago when it was doing approximately $600,000 in sales. Sales have increased by 1200% in that period of time. Reed’s has expanded the SKU’s for Virgil’s to 10 items. Today Virgil’s is generating roughly $7.5 million in sales and over $2 million in gross profit on an annual basis.

Mr. Chris Reed, Founder, Chairman and CEO of Reed’s, Inc., commented, “The Sonoma Sparklers brand is a natural complement to our existing product lines. The sales are through our distribution channels and we share many of the same customers.” He added, “Sonoma Sparklers have great potential. These beverages are 750ml size celebration drinks, a category that is traditionally sold more heavily in the 4th quarter. This will enhance our seasonality by bolstering fourth quarter sales. More strategically, it strengthens our 750ml production capabilities and re-focuses the efforts of David Cortz, the founder of Sonoma Sparkler, toward Reed’s business development in private label sales. David’s experience is invaluable in our launch into this new line of business.”

Mr. Reed continued, “While the Sonoma Sparkler brand products will comprise a small part of our overall revenues, the premium products fit nicely within our corporate strategy. They are comprised of all natural ingredients of the highest quality, with strong brand recognition and customer loyalty in the markets that are served.”

The purchase will be paid in cash from gross profits generated from sales of the Sonoma Sparklers brand over the next 24 months. The Company stated that because this was a cash purchase and did not involve stock, it will not result in any dilution to existing shareholders.

Reed’s, Inc. makes the top selling sodas in natural food markets nationwide and is currently selling in 10,500 supermarkets in natural foods and mainstream. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. In addition, the Company owns the top selling root beer line in natural foods, the Virgil’s Root Beer product line, and the top selling cola line in natural foods, the China Cola product line. Other product lines include: Reed’s Ginger Candies and Reed’s Ginger Ice Creams.

Reed’s products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada. For more information about Reed’s, please visit the company’s website at: http://www.reedsgingerbrew.com or call 800-99-REEDS.

Some portions of this press release, particularly those describing Reed’s goals and strategies, contain “forward-looking statements.” These forward-looking statements can generally be identified as such because the context of the statement will include words, such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. While Reed’s is working to achieve those goals and strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These risks and uncertainties include difficulty in marketing its products and services, maintaining and protecting brand recognition, the need for significant capital, dependence on third party distributors, dependence on third party brewers, increasing costs of fuel and freight, protection of intellectual property, competition and other factors, any of which could have an adverse effect on the business plans of Reed’s, its reputation in the industry or its expected financial return from operations and results of operations. In light of significant risks and uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by Reed’s that they will achieve such forward-looking statements. For further details and a discussion of these and other risks and uncertainties, please see our most recent reports on Form 10-KSB and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Reed’s undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.